What does that yacht represent?

If you asked your average CEO this question, in reference to a boat that he owns, he would probably tell you that it represents years of hard work. He would be right, but there is one thing he would not tell you (and probably does not even admit to himself).

That yacht represents years of hard work, but not his hard work. Yes, his work is represented in it, but only a very small portion of it actually represents his work. In reality, that yacht represents the hard work of thousands, tens of thousands, or hundreds of thousands of minimum wage grunt workers (ok, maybe a bit above minimum wage, but not by much). Furthermore, the money that paid for it actually was probably earned in weeks or months, though the hours added together probably do add up to years.

If you do not see what I am getting, what I am saying is that the money that paid for that yacht was money fairly earned by bottom level employees, that was given to the CEO, instead of the employees that earned it. Now, I am not saying that every bit of profit generated should only go to the person directly responsible, but rather that each lower employee is being robbed a few dollars an hour, so that the CEO and upper management can have more money than they will ever need.

You might disagree with this (please shut up about it if you are in the upper management category, since you have a vested interest in opposing my position), so I am going to give you my reasoning.

Normal bottom tier employees in the US get paid $10 an hour or less. Now, assuming that this is the actual value of their labor, what do you think fair hourly wages would be for someone with a masters degree or PhD would be? Additional education does increase the value of one's work, so obviously, they should get paid more. In addition, they had to pay for this education (actually, in the US, most students are only paying for part of their education, while the government covers the rest), so the cost of time and money spent to gain the education have value. I submit that if the inherent value of education makes it worth paying for, then once you have graduated, the entire cost of your education has been compensated by the increase in value of your work. In other words, you can either claim added value for the education, or for the cost of the education, but not both.

Work experience also generally increases value of work (generally, but definitely not always). So, a person with an equivalent degree to a PhD, with twenty or thirty years of work experience obviously is capable of more valuable work than someone without, again, in most cases.

So, back to the question: How much more is this person's work worth? I think that 10 time is probably a bit low. It is probably fairly reasonable for someone with a masters degree or maybe 25+ years experience, but I would buy that it is a bit low for a PhD with decades of experience. How about 100 times? Is it really possible that one persons work can be worth 100 times that of another person? It probably is possible. In engineering, it is not uncommon for one engineer to be 100 times more productive than another. In business, though, does 100 times seem reasonable? Note that we are considering value of work and productivity, not the actual money generated from that work (businesses do this all the time, when they choose to pay their lowest employees, who make up a majority of the workers, orders of magnitude less than the relatively small number of upper management). I think it is safe to say that 1000 times seems a bit absurd. Even in the above mentioned engineering example, generally a small group of 5 or 6 engineers can get similar productivity as a single 100 times engineer (this may not make mathematical sense right off, note that I am not adding the individual work of 5 or 6 people, rather I am accounting for the fact that generally groups working together can accomplish far more than each person working individually, especially in engineering). So, if 5 or 6 people can do the same work as the one, it cannot be considered reasonable that someone should be paid 1000 times that of the lowest workers. (Another thing to take into account is that complex executive style decisions can usually be made better by large groups of entirely uneducated people than one highly educated person. So, if 100 grunts can make group decisions better than one executive, the value of the work of the executive cannot reasonably be considered more than 100 times the value of a single grunt, even if his decisions generate far more profit than that.)

So, by this reasoning we have established that it is very likely that the work of a CEO cannot be worth more than 100 times the work of a single grunt employee. Now let's assume the grunt employee is getting paid $10 an hour. This means that the highest reasonable hourly wage for a CEO is $1,000 an hour (and even then, this value seems absurdly high). We are going to select a grunt that works 40 hours a week, with no vacation or sick time to determine yearly wages. With 52 weeks in a year, that makes his yearly pay $20,800. Now, I'll give the CEO the benefit of the doubt. Let's assume that it is fair to say that he works around the clock, every hour of every year. At $1,000 an hour, 24 hours a day, and 365 day a year, he would make $8.76 million a year. Ok, so most CEOs actually make less than this. Some make more and some, a lot more. Now, since we know that CEOs need to eat and sleep like the rest of us, let's see what happens when we make this more reasonable by assuming they work 16 hours a day (it is probably much closer to 12 or 14, if even that). Let's also give them 4 weeks (28 days for the math) of vacation time (time not spent working is non-productive and thus cannot be considered into fair pay). That gives us $5.392 million. A lot of CEOs do make more than that, though not by a whole lot.

Ok, so the grunt makes $20,800 a year, without vacations, while the CEO makes $5.392 million a year with. Even after the above reasoning, this seems pretty absurd. The CEO is getting paid over 259 times more. Yes, he works more hours, but does is really seem fair to pay him that much more for less than twice as many hours and several years of education?

Now, other things to keep in mind are cost of living. Everyone has this. If we assume that the grunt is renting an small apartment for $500 a month (from my experience, this seems to be a fair guess at a national average for reasonably habitable 1 bedroom apartments), then we can subtract $6,000 a year. If he pays $100 a month for food (this guy never eats out, always buys in bulk and rarely or never buys prepared food), that is another $1,200 a year. We will just assume that he never has doctor bills, utility bills, walks everywhere (no gas or insurance costs), and does not need things like toilet paper or deodorant. This means that he is getting $13,660 a year in spending money. The CEO, is getting $5.385 million in spending money. Yes, I know, he has a bigger house, a car, a yacht, etc... to maintain. These things are luxuries. He has them, because of the spending money. All he really needs to get by is the same things the grunt needs.

Ok, so now for the point. If the grunt is getting $13,660 spending money and the CEO is getting $5.385 million spending money, the CEO is getting 394 times the spending money that the grunt is. Now, in real life, the grunt is probably paying well over $12,000 a month for cost of living, and is bringing home less than $8,800 a year. The CEO is bringing home more like 611 times the spending money of the grunt, but even 394 times the spending money seems pretty absurd.

So, where is this money coming from? Don't tell me it comes from the corporation. The corporation does not make money, they just do business to earn money from people who are willing to pay for their products. You might tell me that the money comes from the customers and you would even be half right. If you follow the actual cash flow, the money does seem to come from the customers. It also comes from the employees, at least, in any instance where the employees are not being paid fairly.

Again, my reason is as follows. Let's take a company that starts out charging fair prices and paying fair wages. This company is essentially neutral. It does not unfairly take money out of the economy or withhold money from parts of the economy that has fairly earned it. Now, let's say this company raises its prices. It does not raise wages equivalently. It is now ripping off both its employees and its customers. By raising prices, it requires that others pay more for goods. When others have to pay more for goods, they will have to raise their own prices (that, or they will suffer unfairly). Eventually, everyone will have to raise prices, to compensate. If this company does not increase the wages of their employees, they are now paying their employees less than they were originally. Now, you might think that the employees are still getting paid the same and if you are counting pay only in dollars, you would be right. The catch is that the inflation caused by the increase in prices reduced the value of the money itself, thus if the people are getting paid the same amount of money, they are being paid less value for the same amount of work. In other words, the money that the company is overcharging is also the money that they are underpaying. When a company pays one person more than the value of their work, the company is helping that person steal money from their customers and their employees.

Now, let's take this one step further. Most CEOs also get many extra work benefits. To get a fair representation of how much they are actually making, you have to quantify the value of these benefits. Yes, the grunt is also getting benefits (he is working 40 hours a week, after all). Now, assuming the grunt can afford all of the benefits (most can't), the value of his benefits are still hundreds of time less than those of the CEO, if not thousands (this is not unusual, and that is just counting stock options). So, the CEO is making 200-500 times what the grunt is. Some of this is fair, but even if his work is only worth half of that, he is still overpaid by $2.69 million a year. He is stealing $2.69 million a year from the employees and customers of the business. That amount of theft is considered grand larceny. In the US, it is illegal for a poor person to commit this crime, but for a CEO no one even blinks.

Ever wondered why our economy is doing poorly? It is because the bottom resource is not even valued enough to pay for its own upkeep. Some products are fair to negotiate the lowest price for, but since labor costs actual man hours, if it is treated like one of these products, the economy will continue to flounder until it fails.

So, what does that yacht represent? It represents the theft of millions of dollars from those who can afford it the least. It represents the work of thousands or millions of other people, from whom the value was taken forceably and without consent. It represents the largest flaw in our legal system. Any other form of theft would be punished with severe consequences. This form, though, is rewarded with more riches than one person can ever spend.

Lord Rybec

Polygamy

You may have heard about the TV show about a real polygamist family (Sister Wives). My wife has been watching it and I have caught most of it as a result. It is a very interesting perspective, especially considering that polygamy is still widely practised in other parts of the world, though rather differently.

As a Mormon (mainstream Mormons have not practised polygamy for over 100 years), I have a different take on polygamy than most people and a better understanding of the situation than most people. Many polygamists in Utah and nearby states (who use the early doctrines of the LDS Church as justification) do not practice polygamy as it was taught by Joseph Smith (the founder of the LDS Church). The family on the TV show does practice it as taught by Joseph Smith, for the most part.

This family has come out and admitted to practising polygamy. As mentioned on the show, this is extremely unusual for LDS Fundamentalist polygamists. They have said that their intent is to show that not all polygamists are bad (in the last 10 years there have been numerous cases of polygamist families getting in legal trouble for forcing underage marriages, sexual abuse, and many other horrific crimes). From what I have seen, they have done a decent job of showing this. Actually, most polygamists are not bad; misguided maybe, but not bad. (I served a mission in Utah and heard and saw a lot about polygamists living there.)

This family is now under investigation for polygamy. One of the wives had been fired from her job for practising polygamy (is it any wonder that most polygamist families are secretive about it). They took a huge risk to try to show the world that polygamy is not the evil cult that it was thought to be and now they are suffering for it.

I would like to mention here that I do not condone polygamy. It is against the standards of the LDS Church (of which I am a member) and against the law. This is what I would like to discuss.

This family is being investigated because polygamy is illegal. The original reason it was made illegal is that non-LDS men living in primarily LDS communities often had a very difficult time finding a wife. This was partially because the LDS faith recommends against marrying outside of the faith. It was also partially due to the fact that some LDS men had several wives. These non-LDS men blamed the lack of interested women on polygamy and lobbied for it to be made illegal and were eventually successful. The LDS Church outlawed polygamy when the US government outlawed it. (One of the commandments within the LDS Church is to obey the law of the land. Since this and polygamy were conflicting commandments within the Church, it was decided that the commandment to obey local laws was of higher priority and the practice of polygamist marriages was discontinued.)

Now, it is also illegal in the US (at least, in all states that I am aware of) to have sex with anyone that you are not legally married to. Of course, this law has not been enforced for nearly 100 years. This and the law against polygamy (which prohibits being legally married to more than one person) essentially covered all the bases. If you were legally married to multiple people, you were breaking the law, and if you had multiple wives, but were only legally married to one, you were committing adultery, which was also illegal. Now though, since adultery is no longer considered or prosecuted as a crime (though it is generally still illegal), things work differently.

Polygamy is now often prosecuted even if the participants are not legally married. This is, of course, not how the law against polygamy actually works, but our legal system seems to allow judges to make decisions based on personal beliefs, as opposed to codified law.

This family only has one legal marriage: the first. The other marriages were performed by religious ceremony, but no licenses were obtained or sent in. Technically, there is no law against this, but the marriages are not legally binding or recognized. This does not fall under the legal definition of polygamy (it does fall under the legal definition of adultery, but it would be extremely hypocritical to attempt to prosecute for this).

This situation is barely different from one where a married man has three mistresses. It is also very similar to the situation where a male high school student makes a point out of trying to sleep with as many girls as possible. There is only one major difference. This man takes responsibility. He is not hiding his "mistresses"; his wife is totally aware of them (and in most cases recommended them and in all cases approved them; approval of additional wives by the first wife was a requirement of original LDS polygamy). He takes responsibility for the children that have come from these relationships and makes sure that they are being well cared for. He is providing separate living areas for each woman and her children (something mentioned by Joseph Smith when teaching how polygamy was to be practised). And, last but not least, this guy is being accused of moral and legal transgressions.

If we are going to prosecute polygamy, we should also prosecute anyone who has sex with someone they are not married to. By prosecuting this family, but not the high school student, we are saying that irresponsible sex with multiple partners by people who are not even capable of dealing with the consequences (children) is more morally correct than responsible sex with multiple committed partners by people who are capable and prepared to deal with the consequences. We are also saying that secretly committing adultery is more moral than having an open, committed sexual relationship with someone that has been approved for this by our current spouse or spouses, and who we are willing and able to help support and be responsible for.

This is extreme hypocrisy. Our society condemns the man who openly cares for and supports several women, but considers secret uncommitted flings to be a matter of privacy and personal preference. We stand behind a law that was clearly intended as religious discrimination, but ignore laws that were intended to protect people from breaches of contractual commitments. (Adultery is now only considered in divorce cases where a pre-nuptial agreement covers it, even though adultery is legally a breach of the marriage contract.)

While I do not condone polygamy, I do think that if we are not going to start rigorously enforcing laws against adultery and fornication, we should stop prosecuting polygamy, at least, if there is not more than one legal marriage. Otherwise, we are discriminating against religious beliefs. We do not prosecute Catholics who commit adultery, even though it is against their religion and the law. So, why is it that we prosecute against polygamy when it is not against the religion of the polygamists and is technically the same crime as the Catholic committed if there is not more than one legal marriage? Again, the difference being that the polygamist is doing it responsibly and with the consent of his wife.

Lord Rybec